Poultry News

JBS USA Announces Debt Refinancing

16 September 2013

US - On 13 September, JBS USA announced debt refinancing of US$1.0 billion, aimed at reducing its debt-servicing costs.

JBS S.A. has announced to its shareholders and to the market in general that, further to the Company’s Notice to the Market dated 3 September 2013, it has priced the reopening of the Notes due 2021 with a coupon of 7.25 per cent ('Notes') in the amount of US$500 million, through its wholly owned subsidiaries JBS USA, LLC and JBS USA Finance, Inc., and within the terms of an offering made under Rule 144A and Regulation S.

Further to the Notes issued, JBS USA borrowed a further US$500 million as an incremental Term Loan ('Incremental Term Loan') under the same conditions and with the same guarantees as its present Term Loan and with a coupon of LIBOR plus 2,75 per cent, maturing in 2020.

Both the Notes and the Incremental Term Loan had multiple over-subscriptions. Standard and Poors issued a BB rating while Moodys issued a Ba3 rating for both issuances.

JBS intends to use all the proceeds to extend its debt maturity through the refinancing of its shorter term debt and principally through taking out its Senior Unsecured Notes with a coupon of 11,625 per cent due in 2014 ('2014 Notes').

The conclusion of both these issuances is another important step in improving the debt profile of JBS and represents a cost reduction in the order of US$40 million per annum in debt-servicing costs, thus generating value for the Company’s shareholders.